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U.S. DOL Plans to Review Contractor Affirmative Action Certification

Executive Summary: On August 3, 2018, the head of the U.S. Department of Labor’s (DOL) contractor enforcement office announced that the DOL intends to identify and audit contractors who fail to certify their affirmative action compliance to the government. The announcement was made by Craig Leen, Acting Director of the Office of Federal Contract Compliance Programs (OFCCP), during the National Industry Liaison Group conference in Anaheim, California.

Contractors’ Current OFCCP/AA Obligations: Presently, federal contractors are required to comply with a variety of affirmative action requirements, including outreach, recruitment, and training obligations. These requirements are separate from, and in addition to, contractors’ obligations under workplace anti-discrimination laws. Contractors are required to certify to the General Services Administration (GSA), under penalty of perjury and the False Claims Act, that they either have an established affirmative action plan in place, or that they are not required to do so. Under the current certification process, federal contractors can locate and respond to the certification of compliance question through the GSA’s System for Award Management (SAM) registration system.

Proposed Process for Audits: Mr. Leen stated that the audits will be conducted by the OFCCP, which will rely on data retrieved from the GSA to identify contractors who have not verified their compliance with affirmative action requirements. Although the OFCCP already collects federal contractor data from the GSA, this is the first time it has proposed to specifically single out for audit those contractors who have not certified that they have developed, and have on file at each establishment, an affirmative action program as required by the rules and regulations of the Secretary of Labor. (In the past, the OFCCP has audited contractors through randomized, neutral processes of selection.) The proposed review of contractors’ self-certifications would, in theory, enable the OFCCP to focus audits on contractors who have chosen not to prepare annual affirmative action plans. Currently, no time frame has been provided for when this newly proposed audit selection process would begin. We anticipate more details about the certification review process will be forthcoming in the near future.

Background Behind the Audit: The proposed plan to target noncompliant contractors for audit arises directly from a 2016 report by the Government Accountability Office (GAO), which analyzed the OFCCP’s practices and made recommendations as to the methods by which the agency could audit contractors in a more efficient manner. In addition to recommending implementation of a mechanism by which the OFCCP could monitor contractors’ compliance certifications, the GAO report also recommended that contractors electronically submit their affirmative action plans to the OFCCP on an annual basis. However, some experts in the field of affirmative action compliance do not foresee this latter recommendation being implemented anytime soon, particularly because of the burden it would place on federal contractors, as well as concerns over data privacy and security.

The Bottom Line: Federal contractors who maintain compliance with their affirmative action requirements and have self-certified their compliance with the GSA should not view the OFCCP’s recent announcement as cause for concern. Contractors who have not certified their compliance, on the other hand, or who cannot certify compliance because they do not prepare their affirmative action programs annually, should anticipate and prepare for an audit by the OFCCP. To avoid a potential audit by the OFCCP pursuant to the newly proposed method of identifying noncompliant contractors, federal contractors should ensure they have certified their compliance with the GSA, and that they have current affirmative action programs in place for each of their establishments.

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